The good news for Microsoft is that its enterprise cloud has a projected run rate of $6.3 billion this year. That's up from $5.5 billion just three months ago.

But the bad news is that Microsoft's old traditional business — licensing software like Windows and Office for use on new PCs — is shrinking like crazy, amid a tougher market for PCs in general.

Overall, Microsoft's Devices and Consumer Licensing business, the catch-all unit responsible for Microsoft Windows on new PCs, consumer versions of Microsoft Office, and Windows Phone on phones from other manufacturers, was down 24% from last year, a dip of about $1.1 billion.

Microsoft Windows licensing revenue for businesses fell 19%, and fell 26% for consumers, for an overall 22% dip in revenue. Microsoft blames this on the generally weak PC market, hard comparables with last year (when a deadline for the end of Windows XP support drove a lot of PC upgrades), and a general trend towards cheaper devices.

Meanwhile, Microsoft Office consumer revenue was down 41%, and Microsoft Office commercial revenue was down 16%. (Note that business versions of Office roll up into a different financial segment, Commercial Licensing.)

Microsoft cites this as a side-effect of huge growth in Microsoft Office 365, which has a subscription-based model. It also blamed slow PC sales — the fewer PCs sold, the fewer people and companies buy Office for them.

Also, Microsoft Office is pre-installed on a lot of new PCs in Japan, and the weak PC market there cuts into that business, Microsoft says.

All of which adds up to a strange conclusion: The businesses and technologies that made Microsoft so successful in the first place are slowly fading in favor of the cloud.

That's going to cause some short-term pain, but at least Microsoft has prepared for the shift, and its cloud growth is a nice bright spot. Plus, it's always possible that Windows 10, expected out at the end of July, will drive growth in the PC market again, as Windows 8 failed to do.

Investors don't seem worried — the stock rose more than 3% after hours.